Can Staples Regain a Retail Foothold Beyond its Core Service Offerings?

Staples may have taken a significant hit to its fortunes over the course of the 2010s, as an extensive report issued by Modern Retail’s Melissa Daniels outlined, tumbling from its spot on the Fortune 500 list and enduring a M&A failure due to antitrust concerns in 2015 before being purchased by Sycamore Partners in 2017.

Since then, according to Daniels, Staples has leveraged an array of seemingly unrelated services which it is uniquely poised to deliver — providing 945 locations nationwide within five miles of 90% of the U.S. population — including printing, shipping, and passport-related services.

Speaking with the outlet, President of Staples U.S. retail Marshall Warkentin emphasized not only the aforementioned services, as well as the 200 stores providing TSA PreCheck enrollment to the tune of a million approvals annually, but also the company’s refocused effort to recapture its core retail business.

Travel Is Big Business for Staples, Including the Physical Necessities Required To Do So

Warkentin began by noting that travel was a booming category for Staples, growing by double digits year-over-year as COVID-era restrictions fade away and are replaced by continuing demand.

And while passport services have been beefed up by the business retailer (Staples now offers same-day passport photos and processing services, in addition to the TSA PreCheck enrollment), the physical products that come alongside these services have also proven a boon to the red-and-white brand.

“Travel is also a really cool one. That allows us to create new relevance in the store. We do passport photos, over a million of those a year. Then we convert that [foot traffic] to product sales: luggage, travel accessories, tech for travel, headphones,” Warkentin said, before pivoting to mention that services were still at the core of the game plan.

“All of that is part of the story of new relevance moving to services-based, which allows you to sell more products and helps us evolve from some of those core categories that are more in decline,” he added.

Shipping Requires Materials, and Recycling Equals Sustainable Foot Traffic for Staples

Shipping is also central to Staples’ continuing operations, according to Warkentin.

While the shipping service itself may be of central importance, the very act itself requires an array of physical accoutrements, including packing tape, packing materials, boxes, labels, etc.

Given the growth of e-commerce, both for large and small business, Staples appears well-positioned to handle the needs of entrepreneurs.

“We’re also seeing meaningful growth in our mail and ship business. We attach a product with shipping supplies and packaging. All that is growing because people, especially small businesses, still need to ship things as part of the e-commerce world,” the exec noted.

Staples has also developed a longstanding reputation as a destination for recycling, particularly ink and toner cartridges in addition to batteries and other electronics items. As sustainability concerns abound in both the retail business and within the broader culture, being known as a destination for recycling of several common consumables or e-waste can drive serious traffic.

“Another interesting category is recycling. We recycle tech, and we’ve recycled ink and toner for years. That role for us as a retailer is a meaningful traffic driver. You could say these are nontraditional categories, but they’re attached to services, and that’s really where our strategy resides,” Warkentin said.

Tech Products: Can Staples Compete in This Category?

When posed the question of which particular merchandise categories Staples was most zeroed in on in terms of future growth, Warkentin was unambiguous in his answer.

“Specifically, tech products. When people think of Staples, many still think of us as an office supply superstore,” he began.

“But as we introduce more technology, our laptop, desktop and tablet business is one of our fastest-growing categories. That’s something we need to keep growing as we transition perception from office supplies to working and learning in a digital way,” he concluded.

The retailer has shown at least some degree of commitment to the idea — most Staples locations feature an extensive collection of laptops, PCs, and PC accessories, from mice to headsets to keyboards to monitors and beyond. And a new pilot project in tandem with Verizon will see phones and other devices sold at brick-and-mortar locations, alongside business-specific services such as phone and internet plans.

But will Staples be able to reclaim market share against established and emerging competitors? The question remains as to whether there there is any room for growth — and if so, how much — when considering the level of saturation versus demand in the U.S. consumer tech space.